Edenville warns of potential capital constraints
Mining News Pro - Edenville is nearing the maturity of a funding agreement it signed with Lind Partners in November 2018 for $580 000.
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The company advised in a statement published on November 27 that it had entered into discussions with Lind on repayment terms.

The directors are confident that mutually agreeable terms can be agreed with Lind on later repayment; however, it remains uncertain whether these discussion will result in a favourable outcome for Edenville.

Should Edenville be unable to reach mutually agreeable terms with Lind, there may be material uncertainty regarding the company’s ability to continue as a going concern, unless the company raises further capital.

However, Edenville says it has a number of supportive significant shareholders whom the directors believe would continue supporting the company in such an event.

Moreover, the company still expects to hand over its Rukwa coal mine operations to its strategic partner Infrastructure and Logistics Tanzania Limited (ILTL) shortly.

Both parties expected the transition to take place before the end of November; however, owing to ongoing administrative issues between the Tanzanian government and ILTL relating to work permits, principally as a result of a backlog caused by Covid-19, the transition has been delayed.

Edenville anticipates that these administrative issues will be resolved in the short term and will confirm a new start date as soon as it is able to.

Edenville’s energy subsidiary Edenville International, based in Tanzania, in August entered into a sales and marketing agreement with Dubai-based MarTek Global.

MarTek is a sister company to ILTL.

The sales and marketing agreement follows a coal mining agreement that Edenville signed with ILTL, which provides for a fixed rate mining and processing contract at the Rukwa coal project, in Tanzania.

The contract mining will be carried out for four years once the agreement becomes effective, with an automatic renewal unless terminated by either party.

MarTek will provide an anchor tenancy at Rukwa, of 3 000 t a month of washed coal and increasing to 5 000 t of coal a month over the first 12 months of the contract term.

MarTek’s purchase price for Rukwa coal is the highest that Edenville has achieved to date and should provide the company with a healthy margin on tonnes sold.

Edenville International and MarTek will share marketing and sales responsibilities in Tanzania for any sales above the anchor tenancy.

MarTek will have exclusive rights to market Rukwa coal internationally at a pre-agreed sales price, with any transport costs to be added to the sales price.

MarTek will leverage its logistics capabilities to supply these new markets.

Edenville International, MarTek and ILTL have agreed to focus on maximising production from the Rukwa project, with a target of increasing capacity in the near term to around 12 500 t a month.

The company advised on November 27 that it was continuing to fulfil its pre-purchase orders for coal.


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